In a move seen as a positive development for institutional adoption of XRP, Ripple CEO Brad Garlinghouse has praised the launch of a new reference rate and real-time indices for XRP by the Chicago Mercantile Exchange (CME) in collaboration with CF Benchmarks.
The announcement, made earlier this week, outlines that CF Benchmarks will begin calculating and publishing the new XRP benchmark daily starting July 29th, 2024. This initiative is expected to provide market participants with transparent pricing data for XRP, facilitating accurate portfolio valuation and the creation of structured financial products.
Details of the XRP Price Index
The new benchmark leverages pricing data from leading cryptocurrency exchanges including Coinbase, Bitstamp, Gemini, Kraken, itBit, and LMAX Digital. To ensure accuracy, each benchmark reportedly utilizes data from at least two of these exchanges.
With the addition of XRP and Internet Computer (ICP) benchmarks, the CME CF reference rates and real-time indices now cover 24 cryptocurrencies, representing a significant 93% of the investible crypto market capitalization. The reference rates will be published daily at 4:00 PM London Time, while the real-time index will provide per-second updates on the USD price of each asset.
Ripple CEO Reacts Positively
The launch of the XRP benchmark has generated excitement within the crypto community, with Ripple CEO Brad Garlinghouse highlighting its potential. He took to Twitter to express his view that the coin price index represents a crucial first step towards the development of institutional crypto products. Garlinghouse further suggested that the initiative reflects a market-driven response to the growing demand for such instruments.
XRP ETF on the Horizon?
Speculation has swirled around the potential launch of an XRP ETF following the introduction of the new benchmark. The reasoning is that a CME-listed coin price index could pave the way for a CFTC-regulated coin futures product – a key prerequisite for a spot ETF listing.
Also Read: XRP Community Divided: Bullish Analyst Predicts “Something Big” After 50% Price Drop
Last month, Bloomberg ETF analyst James Seyffart suggested that a crypto asset must have a CFTC-approved futures product to gain SEC approval for a spot ETF in the United States. While CME has not announced plans for an coin futures product yet, it has clarified that the newly launched XRP benchmark is not a tradable futures contract.
Looking Ahead
The launch of the XRP price index by CME and CF Benchmarks represents a significant development for coin and the broader cryptocurrency market. Whether it directly leads to an XRP ETF launch remains to be seen, but it undoubtedly signifies growing institutional interest in the digital asset.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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